ERCOT report outlines transmission, generation needs in Texas

Filed Dec. 30 at the Public Utility Commission of Texas (PUCT) by the Electric Reliability Council of Texas (ERCOT) was a study identifying long-term transmission needs within the ERCOT region.

The study covers increased transmission and generation capacity needed throughout the state of Texas, which the state legislature has mandated for filing in each even-numbered year.

“Most of the needs for system improvements to the extra-high voltage system noted in this analysis were located in and around the Dallas/Fort Worth region,” said the report. “ERCOT identified six major transmission upgrades that were required for three scenarios, namely, Current Trends, Stringent Environmental and High Economic Growth. The West Roanoke and Fort Worth projects were designed to provide additional transmission sources to meet the growing needs of Tarrant County. The Rockhill and Nevada projects were designed to provide additional support for the counties of Rockwall and Collin located immediately northeast of Dallas. The West Denton area project, which was recently reviewed by the Regional Planning Group (RPG), was seen as helpful in resolving longer-term needs of the Denton area under the High Economic Growth and Stringent Environmental scenarios.

“In addition to the Dallas/Fort Worth area projects, two new paths were added in the South weather zone. In the Stringent Environmentaland High Economic Growth scenarios, the Hamilton to Lobo project was conceptualized to provide an additional path to transfer solar generation from west Texas to the load centers in the south, whereas, in the High Economic Growth scenario, the La Palma to Loma Alta projectwas proposed to serve the Brownsville area Liquefied Natural Gas (LNG) terminal addition.

“In the near-term planning horizon ERCOT is actively studying the needs of the transmission system due to the recently experienced oil and gas exploration and production related load growth. While most of the system needs are expected to be addressed in this near-term horizon, all of the scenarios in this [long-term system assessment] evaluated the long-term needs of the system under varying future conditions for this industry. Some specific oil and gas sector related scenarios include High Natural Gas Prices, Low Global Oil Prices, and High LNG Exports. Continued economic development in the oil and gas sector is expected to fuel a need for further transmission expansion to support the LNG terminals that may potentially be built as seen in the High Economic Growth scenario.

“The High Economic Growth scenario saw the largest increase in system load. This scenario also assumed the addition of two LNG terminals in the Corpus Christi and Brownsville areas. These block load additions combined with the system-wide load growth resulted in eleven 345-kV transmission upgrades with six of them needed by 2024.

“In the Stringent Environmental scenario, generation closer to the load centers was replaced by a large amount of solar and wind generation located in the West Texas and Panhandle areas. The impact of this generation migration was seen in the 2029 model where sixteen 345-kV transmission upgrades were needed as opposed to only five needed in 2024.

“The Current Trends scenario, which assumed that current growth trends continue in the foreseeable future, saw fewer upgrades than the High Economic Growth or Stringent Environmental scenarios. This scenario required eight 345-kV transmission upgrades, three of which were needed by 2024.

“The Global Recession scenario, which had the least amount load growth, required only four transmission upgrades in 2029.”

At least one LNG project will need a lot of outside power

Said the report about LNG project development: “The research presented in the stakeholder meetings suggested a significant amount of new load being added to the grid. For instance, the only fully approved project in ERCOT, sited in Freeport, Texas, is expected to require in the excess of 700 MW of grid-supplied power to support its operation. ERCOT patterned its other LNG load requirements after those for the Freeport facility. Of note, the Freeport facility represents a higher net load addition than customary for LNG facilities. The facility will use large electric motors to drive the significant compression needs of the liquefaction process. This equipment choice results in higher electrical load requirement than a facility with the same LNG capacity, but instead uses the more typical natural gas driven compressors. Because ERCOT is conducting a long-term planning study, ERCOT chose to assume any LNG facility would have similar load characteristics to the Freeport LNG facility. ERCOT assumed 400 MW per Bcf/d of LNG capacity. ERCOT also assumed that, like the Freeport LNG facility, grid-supplied power would serve the total load of any LNG facility. This scenario is also characterized by a healthy global and U.S. economy driving the global demand for natural gas higher.”

Said the study about assumed power plant retirements: “The retirement process for this LTSA had two distinct parts. First, a group of fixed retirements were determined for use in all scenarios. These fixed retirements were determined by the age of an existing facility. Wind units were retired after 25 years of operation, steam gas units were retired after 50 years of operation, and coal units were retired after 55 years of service. The second part of the retirement process considered economics as the criterion for retirement. Based on economic simulations, if a unit’s fixed and variable costs were greater than the unit’s total revenue the unit was retired in the next model year studied. The total fixed retirements by capacity type, as described above by age, were 1,208 MW of coal, 6,399 MW of steam gas, and 1,182 MW of wind.

“ERCOT staff performed the generation expansion process for nine scenarios. In general the scenario results indicate that natural gas will remain the primary fuel used to meet ERCOT load however wind and solar resources will continue to developed. The amount of energy being met by coal generation declines in most scenarios from roughly 34% to about 25% of load by 2029 and approximately 50% of the coal fleet is retired in the Stringent Environmental scenario.” That stringent scenario, by the way, includes the effects of the U.S. EPA’s CO2-reducing Clean Power Plan for existing power plants, proposed in June 2014.

Under the stringent category: “Many of the environmental policies being discussed today, [greenhouse gas], [Cross-State Air Pollution Rule], [Mercury and Air Toxics Standards], etc., are implemented in this scenario as well as a continuation of subsidies for renewable generating types. The combination of expected high natural gas prices, continuation of [federal tax credits for renewables], and increased emission costs (SO2, NOX, and C02) in this scenario resulted in a large amount of renewable resources being built.

“While some natural gas generation continues to be built the vast majority of new generation was from solar and wind, 16,500 MW and 13,291 MW, respectively. When combined with the existing renewable generation fleet, this scenario results in addition of over 40,000 MW of intermittent resources on the ERCOT system. Additionally, 480 MW of geothermal, 240 MW of biomass, as well as 2,200 MW of new nuclear resources were added to the generation mix in this scenario. Conversely, over 20,000 MW of existing ERCOT resources retire from service. This capacity includes most of ERCOT’s steam gas units and roughly half of the coal fleet. The capacity factor on the remaining coal units in 2029 is reduced to 35%, which is slightly lower than today’s average of 40%.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.